FWD pays $2.5m penalty over anti-money laundering failures

IA inspection uncovered gaps in third-party payor checks and customer due diligence.

FWD Life Insurance Company (Bermuda) Limited has been fined $2.5m (HK$19.5m) by Hong Kong’s Insurance Authority (IA) for shortcomings in its anti-money laundering and counter-terrorist financing controls.

The penalty follows an on-site inspection under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance.

The IA found deficiencies in the insurer’s controls for identifying third-party payment payors, monitoring potentially suspicious transactions, including cash payments, and capturing and screening data on politically exposed persons.

The insurer also failed to conduct adequate customer due diligence on certain transactions.

FWD has introduced measures to address the findings and strengthen its governance, controls and oversight.

The IA acknowledged the company’s early acceptance of the findings and its commitment to resolving the issues. 

FWD also confirmed that enhanced reviews found no cases of ineligible customers being onboarded as a result of delayed detection.

In a statement, FWD said remediation was substantially complete in the areas identified for improvement following the routine inspection, which began in 2023.

The company said it had conducted a thorough review of customers onboarded during the relevant period and confirmed that no ineligible customers had been taken on.

“FWD cooperated closely with the IA and is fully committed to making ongoing investments in people, systems, and processes to ensure we meet the high standards expected of us,” it said in a statement.

The IA said all authorised insurers conducting long-term business must maintain effective anti-money laundering and counter-terrorist financing controls to prevent financial crime and protect Hong Kong’s position as an international financial centre.

(US$1 = HK$7.84)